Question

Q1.Suppose bond (a) is a risk free bond and pays 3%, suppose also that bond (b) has a default risk with probability 5%; what shall be the value of the risk premium on bond (b) Select one:

a. 5.4%.

b. none of the above

c. 3.1%.

d. 2.3%.

e. 4.5%.

Q2. In what way does unemployment duration affect the probabilty of re-employment Select one:

a. they are unrelated

b. neutral

c. negatively

d. positively

e. either positive or negative c. 3.1%. d. 2.3%. e. 4.5%.

Answer 1